WPP reports 1.6% fall in organic growth for the first quarter

wpp

Global media and advertising giant WPP has reported a 1.6% decline in organic growth for the first quarter of the year.

The London FSTE 100-listed powerhouse had earlier acknowledged that the first part of the year would be tougher.

WPP Q1 results

WPP said that growth in the UK and Western Continental Europe was offset by declines in North America and Asia Pacific, which saw strong growth in India offset by a decline in China.

Revenue growth among its bevvy of integrated agencies declined 0.7%, with 2.4% growth in GroupM offset by a 3.3% decline at integrated creative agencies with the loss of assignments at healthcare client, Pfizer, and reduced spend at technology companies.

However, it also recorded new client wins from AstraZeneca, Canon, Molson Coors, Daiichi Sankyo, Nestlé, Perfetti, Perrigo, Rightmove and Telefónica.

The company reported strong progress on the strategic initiatives laid out at its analyst day back in January, saying that Burson, GroupM and VML were all on track to deliver targeted in-year savings and well-placed to benefit from a strong pipeline.

Possibly this year’s hottest focus among media companies and brands, WPP said it was making ‘continued strategic progress’ on AI initiatives.

Mark Read, Chief Executive Officer of WPP, said: “The first quarter of 2024 was very much in line with our expectations with performance reflecting the toughest comparator of the year.

“Strategically, we have progressed well on the priorities set out at our Capital Markets Day at the end of January.

“We’ve rolled out multiple AI tools through our intelligent marketing operating system WPP Open, including the latest foundation models from Bria, Google and OpenAI, and at Google Cloud Next we launched our Performance Brain to predict the best-performing content ahead of campaigns going live.

“These products are being deployed at scale, together with investment in training for our people. WPP Open was also at the heart of our most recent new business successes, including major media wins with Nestlé.

“Structurally, VML is now well established and is on track to deliver savings. GroupM is progressing well with its simplification and Burson will be operational in July.

“I’m very pleased with the progress we are making and we are already seeing the benefits of a simpler and more agile structure for our clients.

“Our outlook for the full year is reiterated.

“We remain on track to return to growth in the balance of the year, supported by an encouraging new business pipeline and the strength of our business creatively and in media, both powered by new AI capabilities, while our simpler structure will drive organisational flexibility and stronger cash conversion.”

WPP’s shares were trading 1.3% lower at £7.93 in London, following its results for the quarter.